When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

Abstract

Management researchers increasingly realize that some theories do not merely describe, but also shape social reality; a phenomenon known as "performativity." However, when theories become performative or even self-fulfilling is still poorly understood. Taking this gap in current research as our starting point, we develop a process model to show that new theories will only become self-fulfilling (1) if they motivate experimentation, (2) if experimentation produces anomalies, and (3) if these anomalies lead to a practice shift. On that basis, we identify six boundary conditions that determine whether theories will come to shape social reality. To illustrate our argument, we explore the conditions under which theories that postulate a positive link between corporate social performance and corporate financial performance may become self-fulfilling. KEYWORDS:Anomalies, boundary conditions, corporate social performance (CSP), experimentation, performativity, socially responsible investing (SRI) 3/53In the course of the last decade, management scholars and other researchers in the social sciences increasingly realized that some theories do not merely describe, but also shape the patterns of social interaction that constitute social reality (Callon, 1998;. They dubbed this phenomenon "performativity." The most "intriguing" cases of performativity arise when theories become self-fulfilling; that is, when using theories increases the "conformity" between theories and social reality (MacKenzie, 2006: 18-19). A well-known example thereof is the Black-Scholes theory, where using that theory pushed option prices toward the prices that the theory predicted (MacKenzie & Millo, 2003). In such cases, theories can become self-fulfilling by reshaping the language, social norms, and institutional designs of traders, managers, policy-makers, or other actors (Ferraro, Pfeffer, & Sutton, 2005a).Further studies in this tradition examined, for example, how rational choice theory makes decision-making within organizations more rational (Cabantous & Gond, 2011) or how mainstream financial theories reinforce the currently widespread technocratic approach to financial regulation (Marti & Scherer, 2016).Most studies on performativity to date focus on theories that have successfully transformed social reality. However, because of this "success bias," the literature lacks a clear understanding of the conditions that determine whether theories become performative or not. This lack of understanding becomes particularly apparent where the "strongest" forms of performativity (MacKenzie, 2006: 19) are concerned; that is, when theories become self-fulfilling (Healy, 2015: 176). Current research thereby neglects the insight of Felin and Foss (2009b) that social reality is not invariably malleable. Keeping in mind these shortcomings of previous research on performativity, we set out to explore how boundary conditions determine whether a theory will become self-fulfilling or not. 4/53To analyze these boundary conditions, we start by developin...

Integrating Behavioral Decision Theory and Sustainable Supply Chain Management: Prioritizing Economic, Environmental, and Social Dimensions in Carrier Selection

“…). This reflects research that suggests theory can shape social realities and eventually become self‐fulfilling (Marti and Gond ). In advocating for change, proponents of these perspectives could integrate existing theory to aid in understanding underlying mechanisms that can be a focus of change.…”

“…The logic is that if the SSCM paradigm that guides research changes, then changes in practice are more likely to follow (Montabon et al 2016). This reflects research that suggests theory can shape social realities and eventually become self-fulfilling (Marti and Gond 2017). In advocating for change, proponents of these perspectives could integrate existing theory to aid in understanding underlying mechanisms that can be a focus of change.…”

Seeing the potentialities at the intersection: A reflection on performativity and processuality mindsets

“…Many performative studies, especially those influenced by Callon (2007) who defines performation as a process, offer a "process" model in order to account for performativity (see e.g. Ligonie 2018;Marti & Gond 2018;Svetlova 2016;Vargha 2018). Yet, even in these studies, processuality often takes the backstage, as performative scholars focus their attention on other aspects, such as performative work (e.g.…”

Re‐imagining supply chain challenges through critical engaged research

“…The “performativity as bringing theory into being” approach focuses on the performative nature of scientific statements, including economic and management theories and draws on the work of Callon (1998) and Latour (1996). The central argument of this approach is that scientific discourses do not simply describe the “objects” of scientific inquiry but also creates those objects too, that is, they become “self‐fulfilling theories” (Marti and Gond, 2017). In the last century, a considerable body of scientific discourse has been constructed on management practices and management tools.…”